Parents should know that there will come a time when they have to teach their kids how to use credit cards properly. We all know it’s a difficult aspect in finance on how to properly use credit cards. The consequences of being irresponsible with a credit card are rough – you can end up getting caught in debts, high interest rate, the stress of having to work hours and many more.
So, when it comes to finding the right credit card for college students, smart thinking and teaching will go a long way to help them understand the importance of handling credit cards financially.
Prepaid Credit Cards
One of the most popular ways to teach college students about the responsibilities of using credit cards is by giving them prepaid ones – a debit card which is quite similar to a gift card. A parent can easily load the card through a bank account, mobile phone, credit card or online transfer.
Prepaid credit cards can be used widely, same as typical credit cards, without getting worried about overdrafts and high interest rates.
There are really a lot of features when using prepaid credit cards.
They can be great to use for allowance and budgeting – One of the best reasons about using prepaid credit cards is that you can set up payments for college students. A perfect tool for allowance or as a payment method for expenses around the house. And, giving them a set amount every month will teach your teen how to budget the money properly while having the flexibility to use them with some personal necessities. They will most likely learn, good or bad decisions on how they spend the money – teaching them the importance of being financially responsible without having them roughly be in debt.
Prepaid credit cards have phone applications – Another great thing why you should consider prepaid credit cards is that they have phone apps. You can easily keep up and check their accounts on how they’re spending. You can even see what they’ve bought and how much is left in their card. It’s a great way to check on their spending while giving them the freedom not to ask every little purchase. In addition, you can plan a monthly talk with them and help them how they can manage their money properly.
Convenient text alerts – Another feature of prepaid credit cards is text alerts which are connected to both of you and your kid when purchasing in real time. When you activate text alert, you will be able to check their purchase and you’ll also be both alerted if its an unauthorized purchase. You can lock the card by simply sending a message through the network. A perfect feature that comes in handy if the card got lost or to block too much spending for disciplinary purposes.